LG Chem (051910) 🔎 In-depth
KOSPI · Price as of 2026-08-06 · Updated 2026-08-09
LG Chem directly runs petrochemicals (plastics and synthetic-resin feedstocks), advanced materials that make cathode materials for batteries, and life sciences covering pharmaceuticals and vaccines, and it also holds roughly 80% of LG Energy Solution, a top-tier global battery subsidiary. Consolidated first-quarter 2026 revenue was ₩12.2468 trillion with an operating loss of ₩49.7 billion; petrochemicals (operating profit of ₩164.8 billion) and life sciences were profitable, but an operating loss of ₩207.8 billion at the subsidiary LG Energy Solution pulled the whole into the red. What stands out lately is that the company's ₩18.7 trillion market cap is only about 30% of the value of its LG Energy Solution stake (roughly ₩62 trillion), a deep discount; this is a phase in which the battery and petrochemical cycles are bottoming out together, so it carries both the potential for a re-rating and the risk of further weakness depending on how quickly the subsidiary's results recover.
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30-second brief
Pulled directly from the computed values below — not a separately written opinion.
What do the SourceComputedEstimateReading tags mean?
Source filings and exchange data · Computed calculated from public data · Estimate our own unverified projection · Reading drafted automatically, then rule-checked. See AI & Automation.
Core valuation metric
This stock's effective sub-sector is “Petrochemicals (NCC & Downstream)” (Chemicals, Refining, Steel & Materials · Chemicals), a type typically read first through P/B.
Petrochemical makers turn crude-derived feedstock into basic chemicals, so profits balloon or swing to losses with the feedstock-cost and product-spread cycle. That makes earnings-based multiples unreliable, so price-to-book (P/B) — the price against the value of large plant assets — is the first lens.
This note explains how each sector is typically valued and is educational context only, not investment advice.
At-a-glance assessment financial health · growth · profitability · valuation
- Operating profit barely covers the interest bill (interest coverage below 1x).
- The most recent full-year net result was a loss.
- Revenue fell 5.7% year over year (3-year trend: falling).
- Most recent quarter (Q1 2026) revenue was 2.6% lower than a year earlier.
- ROE is -5.5% (controlling-interest basis). It is below the sector average.
- Operating margin is 2.6%.
- A sector-metric and in-depth research verdict — see “Valuation vs peers” below for the basis.
Ownership & governance As of 2025-12-31
Largest shareholder LG 31.52% (corporate)
Controlling bloc incl. related parties 31.55%
With the controlling bloc holding 32%, the ownership structure is stable.
Net asset value (NAV) assessment 71% discount to NAV
💡 How to read a holding company · A holding company owns stakes in several subsidiaries. Its P/E swings with equity-method gains and losses on those stakes, so read it only as a rough guide. P/B is more meaningful because subsidiary stakes sit in equity, but book value carries them at low historical cost (so P/B looks higher than reality). The most accurate view is the price against the market value of those stakes (NAV) ↓
Valued against the net asset value (NAV) of its listed holdings rather than a consolidated P/E — see the in-depth valuation for the detailed basis.
Listed subsidiaries ownership
| LG Energy Solution | 79.38% |
🔎 In-depth analysis Reading
LG Chem makes money from four broad businesses. First, petrochemicals cracks naphtha to make ethylene and plastic feedstocks (synthetic resins and synthetic rubber), the core of the parent that accounted for 36% of Q1 2026 revenue. Second, advanced materials makes cathode materials, the core ingredient of EV batteries, along with semiconductor materials. Third, life sciences handles pharmaceuticals such as diabetes and growth-hormone treatments as well as vaccines. On top of this, it holds roughly 80% (about 82% on a directly held basis) of LG Energy Solution, the subsidiary that makes batteries directly, so more than half of consolidated revenue (53.5% in Q1 2026) comes from that subsidiary. In other words, on the surface it is a chemical company, but most of its enterprise value comes from the battery-subsidiary stake — in effect a business-holding structure.
The latest close is ₩261,000 and the market capitalization is ₩18.4 trillion. The price sits above its 20-day moving average (₩254,925) and below its 60-day moving average (₩305,150). Short-term and medium-term trends are diverging, so the direction is best read separately. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 47.7, a neutral level. The one-month change is -1.7%, the three-month change is -38.4%, and the position relative to the 52-week high is -39.2%. Relative strength versus the KOSPI is 11 (on a 1-99 scale, converted from returns against the index over the past year with more weight on recent performance; higher means stronger than the market). It is stronger than roughly 11% of all stocks. Over the past three months it lagged the index by 27.0%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
This is a phase where the financials must be judged by asset value rather than earnings. The P/E ratio (how many times one year's earnings the price represents) cannot be calculated because of the net loss. The P/B (how many times book net assets the price represents) is 0.53x, meaning it trades below book equity. That said, in detail this company is classified in the petrochemical industry and is usually valued on P/B, but in substance the subsidiary stake is the core of its value, so net asset value (NAV) is a more accurate lens. Profitability is weak. ROE (how much is earned in a year on equity) is -5.5%, in the red, and interest coverage (the capacity to cover interest with operating profit) is below 1x, which is tight. The debt ratio (debt against equity) is 164%. However, consolidated net debt is negative (net cash of about ₩9.9 trillion), so EV/EBITDA (debt-adjusted enterprise value divided by pre-depreciation operating cash earnings) is a low 1.5x. The FCF yield (actual cash generated relative to market cap) is a negative -28% because of large battery capital spending, which means that large-scale investment for future growth is under way.
The long-term trend is a decline followed by bottoming out. Revenue fell for three straight years, from ₩55 trillion in 2023 to ₩48.7 trillion in 2024 and ₩45.9 trillion in 2025. Operating profit dropped sharply from ₩5 trillion in 2021 to ₩1.18 trillion in 2025, but ₩1.18 trillion in 2025 was up 35% from ₩874.9 billion in 2024, showing a rebound off the bottom. Net profit, by contrast, went from a profit in 2023 to losses in both 2024 and 2025, the result of subsidiary results and business-restructuring costs. The first quarter of 2026 was a consolidated operating loss of ₩49.7 billion, but the parent's petrochemicals were profitable at ₩164.8 billion, with the loss largely the subsidiary LG Energy Solution's share. This year's profit hinges heavily on how quickly the battery subsidiary recovers and whether petrochemicals passes through the industry bottom. With both industries at a low together, the company has not published an official annual target, so rather than a forced estimate this is left as unconfirmable.
Recent disclosures center on results and business restructuring. On April 30, 2026 it fair-disclosed preliminary consolidated results (revenue of ₩12.25 trillion, operating loss of ₩49.7 billion), and on May 14 it filed the Q1 report. Across April and May, several disclosures of decisions to dispose of subsidiaries' tangible assets came out, showing that a portfolio adjustment tidying up low-return assets is under way. The dividend was maintained at ₩2,000 per share (a dividend-to-price ratio of about 0.8%). At the earnings briefing, the CFO said the company would reshape the portfolio around high-value, high-margin businesses that are resilient to economic swings.
This stock sits at the intersection of subsidiary-stake value and the industry cycle. The conditions for strength are clear. The discount is deep enough that the market cap is only about 30% of the value of its LG Energy Solution stake, so if the battery industry recovers or a sale or return of the subsidiary stake becomes concrete, there is large room for a re-rating. The petrochemical parent has already turned profitable. The cautions are equally clear. Petrochemicals is in a downcycle where oversupply may persist through 2027, so margin recovery could be slow. LG Energy Solution, which makes up most of the net assets, is still posting an operating loss in the early stage of recovery, so if the subsidiary wobbles the discount is further justified. In summary, when the battery and chemical industries recover together the undervalued stake value comes to the fore, and if the industry bottom drags on the deep discount persists.
🔎 Valuation vs peers Fairly valued
Reflecting its de facto business-holding character, it is compared both against (1) petrochemical downcycle peers (Lotte Chemical, SK Innovation) and (2) the battery subsidiary that makes up the core of NAV (LG Energy Solution).
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| LG Energy Solution | 0.00x | 3.64x | -5.31% |
| SK Innovation | 0.00x | 0.78x | -15.36% |
| Lotte Chemical | 0.00x | 0.19x | -16.19% |
The P/E is not calculable because of the net loss, and the P/B of 0.57x is hard to rely on as a standalone basis because book equity, carrying the subsidiary stake at acquisition cost, makes it look higher than reality. In substance it is more accurate to view it by subsidiary-stake value (NAV). The LG Energy Solution stake alone is worth roughly ₩62 trillion, more than three times the company's ₩18.7 trillion market cap, so it trades at a very deep discount, around 30% of the subsidiary-stake value. On the surface this may read as undervalued, but a large part of the discount has a reasonable basis. The core subsidiary that makes up most of the NAV is still in the early stage of recovery with an operating loss and sits in a relatively high valuation band, while the remaining petrochemicals is in an oversupply downcycle. Relative to chemical peers the parent is sound, but until the subsidiary's recovery is confirmed the deep discount can persist, so rather than declaring it undervalued it is judged to be fairly valued.
Price history Close · MA20 · MA60
The latest close is ₩261,000 and the market capitalization is ₩18.4 trillion. The price sits above its 20-day moving average (₩254,925) and below its 60-day moving average (₩305,150). Short-term and medium-term trends are diverging, so the direction is best read separately. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 47.7, a neutral level. The one-month change is -1.7%, the three-month change is -38.4%, and the position relative to the 52-week high is -39.2%. Relative strength versus the KOSPI is 11 (on a 1-99 scale, converted from returns against the index over the past year with more weight on recent performance; higher means stronger than the market). It is stronger than roughly 11% of all stocks. Over the past three months it lagged the index by 27.0%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
Relative performance stock vs index · start = 100
Excess return vs index · 3M -26.95% / 6M -30.80% / 12M -55.91%
Key metrics Computed vs whole-market median
Valuation
A net loss makes the P/E an unreliable valuation gauge. The P/B of 0.53x is below the whole-market median (0.84x).
Enterprise value (EV)
EV = market cap + net debt. It reflects cash and debt, so it captures the real cost of the whole business that market cap alone misses; lower multiples are cheaper relative to earnings or sales.
Profitability & financials
Return on equity (ROE) is -5.5%, below the whole-market average (3.0%). The operating margin is 2.6%. The debt ratio is 165.2%, so the financial structure is moderate.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $38.7B | $34.2B | $32.3B | -5.68% ↑ faster |
| Operating profit | $1.8B | $614.6M | $829.6M | +34.97% ↑ faster |
| Net profit | $939.8M | -$485.3M | -$1.3B | — |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $29.9B | $36.4B | $38.7B | $34.2B | $32.3B |
| Operating profit | $3.5B | $2.1B | $1.8B | $614.6M | $829.6M |
| Net profit | $2.6B | $1.3B | $939.8M | -$485.3M | -$1.3B |
| Revenue CAGR | 4-yr avg 1.90% | ||||
Revenue fell 5.7% year over year (2023 ₩55.0 trillion → 2024 ₩48.7 trillion → 2025 ₩45.9 trillion), and the three-year trend is 'falling'. That said, the rate of decline narrowed from the prior year. Operating profit rose 35.0% year over year. Profit is growing at an accelerating pace. Over the 5 years on record, revenue compound annual growth (CAGR) is 1.9%. The two-year revenue CAGR is -8.6%. In the most recent quarter (Q1 2026), revenue was 2.6% lower than the same period a year earlier.
Latest quarterly results Source Q1 2026 · vs year-ago
Technical indicators Computed
What stands out
- P/E and P/B are both low versus peers, so the price looks inexpensive relative to earnings and assets.
Points to watch
- Operating profit barely covers the interest bill (interest coverage below 1x).
- The most recent full-year net result was a loss.
- The most recent full year was a loss, so it is worth checking whether profitability recovers.
- Revenue fell 5.7% year over year (3-year trend: falling).
Recent news & events searched · sourced
- 2026-04-30EarningsFair-disclosed preliminary consolidated Q1 2026 results — revenue of ₩12.2468 trillion, operating loss of ₩49.7 billion. The parent's petrochemicals were profitable with operating profit of ₩164.8 billion, while the subsidiary LG Energy Solution's operating loss of ₩207.8 billion was reflected.Confirmed a profitable trend at the chemical parent, but weak subsidiary results were the cause of the consolidated loss. The short-term earnings direction is tied to the subsidiary's recovery. Source
- 2026-05-14FilingFiled the Q1 2026 quarterly report — confirming revenue mix by segment (LG Energy Solution 53.5%, petrochemicals 36.0%, advanced materials 6.6%, life sciences 2.5%).Reconfirms a business-holding structure in which more than half of consolidated revenue comes from the battery subsidiary. Over the medium term, the subsidiary-stake value is the core of valuation. Source
- 2026-05-26FilingNumerous asset-disposal and transfer disclosures, including a decision (with amendment) to dispose of a subsidiary's tangible assets — a portfolio adjustment through tidying up low-return facilities is under way.An attempt to improve mid-to-long-term profitability by reshaping around high-value businesses. A factor for short-term cash securing and profit-and-loss variability. Source
- 2026-05-29IRInvestor-relations (IR) event notice — communication on business restructuring and results.A channel for communicating with the market on the direction of the portfolio shift and subsidiary strategy. Source
Figure cross-check computed ↔ external
| Metric | Computed | External | Status | Source |
|---|---|---|---|---|
| Detailed-sector key metric P/B (price against book net assets) | 0.57x | 0.57x | Confirmed | link |
| Market cap against NAV (value of the core subsidiary LG Energy Solution stake) | ₩18.4 trillion | ₩18.4 trillion | Confirmed | link |
| Q1 2026 consolidated results | revenue 12₩246.8 billion, ₩49.7 billion, ₩781.9 billion | revenue 12.25, ₩49.7 billion | Confirmed | link |
Recent filings Source
- 2026-06-01Large-business-group status disclosure
- 2026-05-29Corporate governance report
- 2026-05-29Disclosure
- 2026-05-26Disclosure
- 2026-05-26Amended filing
- 2026-05-14PeriodicQuarterly report
- 2026-05-14OwnershipLargest-shareholder ownership change report
- 2026-05-14OwnershipOfficers'/major-shareholders' holdings report
- 2026-05-06Disclosure
- 2026-04-30Disclosure
- 2026-04-30EarningsFair-disclosure notice
- 2026-04-29Amended filing
📖 Plain-language glossary — expand if you are new to this
- P/E
- How many times a year's net profit the price is worth (lower is cheaper relative to earnings). The P/E here is on trailing (last full-year) results; for companies whose earnings swing fast (memory chips and other cyclicals/high-growth), a forward P/E on this year's expected earnings is more accurate.
- P/B
- Price relative to net assets (equity). Around 1x means it trades near book value; below 1x means below book.
- P/S
- Price relative to a year's revenue — useful for growth companies with thin earnings.
- Net debt / EV
- Net debt = interest-bearing debt − cash. Negative means more cash than debt (net cash). EV (enterprise value) = market cap + net debt, closer to what it would cost to buy the whole business.
- EV/EBIT · EV/EBITDA · EV/Sales
- Enterprise value against operating profit (EBIT), EBITDA, or revenue. Unlike P/E these reflect debt and cash; lower is cheaper relative to earnings power or sales.
- FCF / FCF yield
- Free cash flow = operating cash − capex, the cash actually left over. FCF yield = FCF ÷ market cap; higher means more cash generated per unit of market value.
- Intrinsic value (DCF)
- Future free cash flow (or, for some capex-heavy but profitable names, forecast earnings) discounted to today to estimate per-share value. Because it shifts a lot with the discount-rate and growth assumptions, it is shown as a bear/base/bull range, and the basis and assumptions are disclosed in one line beneath it.
- ROE
- How much profit the company earns in a year on its equity (%). Higher means better returns on capital.
- EPS / BPS
- Earnings per share / net assets (book value) per share.
- Operating / net margin
- Profit left from the core business / final profit after tax and interest, per unit of revenue.
- Debt ratio
- Debt relative to equity (%). Higher means more reliance on borrowing (norms vary by sector).
- Current ratio
- Assets convertible to cash within a year against debt due within a year. Above 100% leaves some short-term headroom.
- Interest coverage
- How many times operating profit covers the interest owed. Below 1x means operating profit alone struggles to cover interest.
- Dividend yield / payout ratio
- The year's dividend as a % of today's price / the share of earnings paid out as dividends.
- Revenue CAGR
- Multi-year growth expressed as a single yearly average (compound annual growth rate).
- RSI (short-term signal)
- Whether recent price action is overheated or beaten down. Above 70 is overbought, below 30 oversold.
- MA20 / MA60 (moving averages)
- The 20- and 60-day average price. Price above them signals a firmer short-term trend.
- vs 52-week high
- How far below the past year's peak the price sits now (%).
All figures are for reference only; how they read varies by sector and over time.
Sources: Korea FSC market-price API (data.go.kr), OpenDART, KRX/KIND — public data only.
Bong Stocks presents public-data-based information for reference only. It is not investment advice and contains no target prices, ratings, or buy/sell recommendations. Verify independently before making any decision.